Russia is facing limited supply of low-density polyethylene (LDPE), due to which it put pressure on prices despite low demand. It is creating lack of supply and rise in prices for LDPE. It all started because of Ufaorgsintez shut for a scheduled turnaround in September; and Kazanorgsintez’s reduced production in September-October due to a lack of ethylene.
Although, the demand for LDPE is not that strong but due to the shortage in production of LDPE, the prices are continuing to go higher. The company Ufaorgsintez has resumed the manufacturing of LDPE after the 30 days of shutdown on 1 October, but this factor has not shown any positive impact on the market. Meanwhile, the other LDPE manufacturer Kazanorgsintez has continued significant restrictions on the supply of LDPE to the domestic market, even in the face of a serious decline in exports since September.
At Gazprom Neftekhim Salavat’s facilities, there has been talk since the end of August on a near full-halt of LDPE production, it is because of economic inefficiency. For the time being the company has confirmed full capacity utilisation in October.